On September 17, 2020, Senate Bill 1159 (SB1159), along with Assembly Bill 685 (AB685), was signed. Formalizing Executive Order N-62-20 which expired on July 5, 2020, SB1159 creates a new framework for COVID-19-related workers’ compensation claims. Here is a detailed look at what SB1159 is and how it affects your business. 

What is SB1159?

California Senate Bill 1159 (SB1159) codifies the COVID-19 presumption created by Executive Order N-62-20 and provides two new rebuttable presumptions that an employee’s illness related to COVID-19 is an occupational injury, and therefore eligible for workers’ compensation benefits if specified criteria are met.

As emergency legislation, this bill is effective immediately, retroactive to July 06, 2020, and will remain in effect until January 1, 2023. If an employee suffers an illness or death resulting from COVID-19 after January 1, 2023, the presumption no longer applies and the case will be treated under the traditional workers’ compensation framework.

As standard practice, employees injured in the course and scope of employment are entitled to receive workers’ compensation benefits for their injuries. Existing law establishes a series of specific injuries and illnesses that are presumed to be “industrial” in nature and creates a rebuttable presumption that will qualify them for workers’ compensation benefits immediately – unless an employer can provide sufficient information to indicate that the injury or illness is non-industrial. Due to the unique challenges brought forth by the COVID-19, SB1159 now creates a similar presumption for illness or death resulting from COVID-19. Here are the changes employers should prepare for:

Codification of Executive Order N-62-20

Under Executive Order N-62-20, issued on May 6, 2020, the workers’ compensation rebuttable presumption was expanded to include any employee who reported to their place of employment between March 19 and July 5, 2020, and who tested positive for or was diagnosed with COVID-19 within the following 14 days during that time period. 

SB1159 takes this rebuttable presumption and extends the period to include any employee who suffers illness or death resulting from COVID-19 on or after July 6, 2020 until January 1, 2023.

New Criteria for Rebuttable Presumptions

SB1159 also lengthens the rebuttable presumption beyond July 6, 2020 for firefighters, peace officers, fire and rescue coordinators, and certain kinds of health care and health facility workers, including in-home supportive services providers that provide services outside their own home. 

For health facility employees other than those who provide direct patient care as well as custodial employees in contact with COVID-19 patients, the presumption does not apply if the employer can show the employee did not have contact with a COVID-19 positive patient within the 14-day period.

For all other employees, the “rebuttable presumption” is only applied if:

  • The employee works for an employer with five (5) or more employees; and
  • The employee tests positive for COVID-19 within 14 days after reporting to their place of employment during a COVID-19 “outbreak” at the employee’s specific workplace.

New Reporting Requirements for Outbreaks

An outbreak exists if, within fourteen (14) days, one of the following occurs at a specific place of employment: 

  1. Four employees test positive if the employer has 100 employees or fewer; 
  2. Four percent (4%) of the number of employees who reported to the specific place of employment test positive if the employer has more than 100 employees; or
  3. A specific place of employment is ordered to close by a local public health department, the State Department of Public Health, the Division of Occupational Safety and Health, or a school superintendent due to a risk of infection of COVID-19. 

For purposes of the “outbreak” presumption, SB1159 requires employers to report to their claims administrator in writing (via e-mail or fax) within three (3) business days when they know or reasonably should know that an employee has tested positive for COVID-19, along with other relevant information:

  • Information on the employee who has tested positive. This should not include personally identifiable information regarding the employee who tested positive unless the employee asserts the infection is work-related or has filed a claim form pursuant to Labor Code Section 5401.
  • The date the employee tests positive—this is the date the specimen was collected for testing.
  • The address or addresses of the employee’s specific place(s) of employment during the 14-day period preceding the date of the employee’s positive test.
  • The highest number of employees who reported to work at the employee’s specific place of employment in the 45-day period preceding the last day the employee worked at each specific place of employment.

Following these reporting requirements is crucial. Employers may be subject to civil penalties of up to $10,000 for intentionally submitting false or misleading information, or for failing to report required information.

What does SB1159 mean for employers?

Since SB1159 is effective immediately, employers need to be vigilant and prepared to respond to any indication that an employee has contracted COVID-19. They should coordinate with their workers’ compensation insurance carriers and claims adjusters to establish best practices for reporting and responding to potential workers’ compensation claims based on COVID-19.

We encourage employers to comply with local health orders and industry-specific guidance for safely reopening. In addition, we recommend employers to gather ongoing evidence, such as:

  1. Measures in place to reduce potential transmission of COVID-19 in the employee’s place of employment, 
  2. The employee’s non-occupational risks of COVID-19 infection,
  3. Statements made by the employee; and
  4. Any other evidence normally used to dispute a work-related injury.

Next Steps for Employers

The passage of SB1159 shows that employers must follow guidelines and take all reasonable steps to keep their workforces safe and healthy as California continues the process of re-opening. To take full advantage of this rebuttable presumption, we recommend that employers and claim administrators quickly investigate each positive test and obtain evidence in all forms. 

COVID-19 continues to be a volatile situation and compounded with new California legislation, navigating the constantly changing legal landscape can be very complicated. If you need any assistance or guidance on the best way to take advantage of this rebuttable presumption, contact Hackler Flynn & Associates.

DISCLAIMER: Content within this post should not be considered legal advice and is for informational purposes only. Communications made through this post do not create an attorney-client relationship. Hackler Flynn & Associates is not responsible for any content that you may access from third-party resources that may be accessed through or linked to this post. Hackler Flynn & Associates is only licensed to practice in California.

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